IN THE MATTER OF GENERAL RULES AND REGULATIONS WITH RESPECT TO THE CONSERVATION OF OIL AND GAS IN THE STATE OF COLORADO, AND RULES OF PRACTICE AND PROCEDURE PERTAINING THERETO AND IN PARTICULAR WITH REFERENCE TO RULE 323

BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO

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CAUSE NO. 407

ORDER NO. 407-50

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 16, 1989 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the verified application of Tower Energy Corporation, for an order allowing an exception location 2278 feet FNL and 880 feet FWL of Section 32, Township 6 North, Range 64 West, 6th P.M., after having drilled a well Johnson 5-32 at the above location for the drilling and spacing unit consisting of the S1/2 NW1/4 of said Section 32.

FINDINGS

The Commission finds as follows:

1. Tower Energy Corporation, as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3. The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

4. Application to Drill No. 89-119 was approved on February 27, 1989 by the Commission for a location 2120 feet FNL and 780 feet FWL of said Section 32 for the drilling and spacing unit consisting of the S1/2 NW1/4 of said Section 32.

5. The hearing in this matter was continued from the August 1989 hearing by the Commission, and from the September 1989 hearing at the request of the applicant. Mary Lou Printz and Henry Printz, Jr. who filed a protest to the application, were not present at either hearing.

6. Based on the facts stated in the verified application, and having been reviewed by the Acting Director as Hearing Officer on October 13, 1989 and recommended for approval, the Commission should enter an order amending Order No.s [sic] 407-1 and 407-10 authorizing the Johnson 5-32 located as described above as an exception to the well location rules in Cause No. 407.

7. The testimony at the administrative hearing was inconclusive as to who may have moved the survey stake, but the testimony was conclusive that no advantage accrued to any interests, and that no drainage is occurring across any unit lines caused by this exception location.

ORDER

NOW, THEREFORE, IT IS ORDERED, that the well Johnson 5-32 located 2278 feet FNL and 880 feet FWL of Section 32, Township 6 North, Range 64 West, 6th P.M. is an exception to the well location requirements of Cause No. 407 for the drilling and spacing unit consisting of the S1/2 NW1/4 of said Section 32 for the production of oil and/or gas from the Codell/Niobrara formations.

IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED this day of 17th of October, 1989, as of October 16, 1989.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

Dennis R. Bicknell, Secretary

Dated at Suite 380

1580 Logan Street

Denver, Colorado 80203